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Over the past several years, Ethiopia's government, which cherishes its role as a U.S. ally in the volatile Horn of Africa, has steadily chipped away at political freedoms, arresting the opposition and quashing the free press. So it was hard not to be skeptical about its move this week to release Birtukan Mideksa, the country's best-known opposition leader.

How you interpret Mideksa's release depends on where you think Ethiopia is going. Has the country, as the opposition and rights groups claim, become a dictatorship that still can't resist making occasional symbolic gestures? Or is it, as Prime Minister Meles Zenawi claims, still marching, slowly but surely, toward democratic and economic openness? (See pictures of Ethiopia's harvest of hunger.)

The government's relationship with Mideksa, a 36-year-old former lawyer and judge, is schizophrenic to say the least. Police first arrested her, accusing her of treason, after the 2005 elections. Rights groups accused the government of stealing those elections and then quashing protests among opposition supporters in which some 200 people were killed in clashes between demonstrators and police.

In 2007, shortly after Mideksa and other opposition leaders acknowledged a role in the violence, the government pardoned her and several other opposition leaders. But they put her back in prison in December 2008 after she denied  in public talks and in conversations with journalists in Sweden  that she had asked for a pardon and suggested that their release was a political deal cut with the government. (Read about humanitarian aid in the wrong hands.)

Opposition leaders say her release on Oct. 5 is part of a well-calculated effort by the government to frame Ethiopia as a law-abiding and compassionate country  an image critics say flies in the face of reality. Mideksa's release, they say, came only because the Ethiopian government realized they could gain nothing politically by keeping her behind bars, while releasing her might bolster its democratic credentials. Meles' government was sworn in at the start of the week, months after highly dubious elections that it won handily. Before the election, Mideksa was seen as a rising political figure whose Unity for Democracy and Justice Party could have been a serious threat to the ruling party, had the vote been free and fair. Human Rights Watch reported massive voter intimidation, and opposition leaders claimed they were not allowed to campaign freely.

"Her determination to participate in the election process and her overwhelming popularity with the public was a cause of concern for those in power," Yilma Bekele, a vocal U.S.-based opponent of the Ethiopian government, wrote in an online column for Ethiopian Review. "We are not thankful to the regime nor do we see it in a different light." Human-rights groups were even less forgiving. Amnesty International called her a prisoner of conscience who was held "solely for the peaceful exercise of her right to freedom of expression and association."

The government, meanwhile, portrayed the release as a humanitarian gesture. President Girma Wolde-Giorgis, whose post is almost entirely symbolic, pardoned her a second time after she reportedly wrote to Meles telling him that she was wrong to have deceived Ethiopians about the earlier pardon and told him she wanted to be reunited with her family. "I express my deep regret for deceiving the Ethiopian people and government by denying my release on pardon," she was quoted as saying in a government statement. "Pledging not to ever resort to these fraudulent and deceptive acts, I beg the Ethiopian people and government to grant me pardon."

Similarly, Meles' regime had portrayed her rearrest and imprisonment in strictly legalistic terms, saying it had no choice but to put her back in jail following her comments in Sweden. "We were put in an almost impossible situation politically and legally," Meles told reporters later. "The law says if a pardon is given under false pretenses it has to be annulled." (See a Q&A with Meles.)

The Mideksa incident mirrors the government's approach to human rights generally. Meles, who took power in 1991, excuses repressive actions by portraying the country's democracy as something still "emerging." He says opposition leaders like Mideksa had stirred dangerous dissent and risked pushing regular Ethiopians into acting rashly, thereby threatening democracy.

Meles has come under little pressure to lead his country any other way  and his semantics come straight from his allies. A U.S. State Department briefing note on Ethiopia exemplifies Western equivocation by giving the impression that the country is moving forward. It says the U.S. is "committed to helping Ethiopia progress in its transition to a multiparty democracy" and working "with the government and opposition parties to encourage positive and productive engagement to advance the country's democratic transition." Similarly, Britain's minister for Africa described Mideksa's release as an "important step forward."

Despite the overwhelming evidence that there is no "positive and productive engagement"  after the latest elections, Meles' party and its allies captured 455 of 457 seats in Parliament  Ethiopia remains a major aid recipient. The U.S. government contributed $862 million in 2009, along with $374 million in food assistance, according to the State Department.

"A de facto one-party state is now in place," Merera Gudina, leader of the opposition Oromo People's Congress, tells TIME. "The Parliament has turned into the one-party Parliament and the Chinese model of revolutionary democracy is now is place. So we are only praying for God to save us." Gudina says he is part of the government's curious effort at image control too. While some opposition leaders like him are allowed to speak freely, regular Ethiopians pay for their opposition with arbitrary arrests, beatings and killings  a claim backed by the U.S. government's annual human-rights report. The countryside is rife with disappearances and fear. (See more on Ethiopia.)

"We have some sort of the right to speak. But our members, the rank-and-file members, are being attacked," Gudina says. "The rank and file, the ordinary party members, are paying the price for our freedom to speak."